How Not to Determine the Best Hotel Loyalty Program

Skift reported yesterday on JD Power’s rankings of hotel loyalty programs (their “Hotel Loyalty/Rewards Program Satisfaction Report”).

Honestly I was hoping this wouldn’t get any pickup, since it’s just another missive likely to mislead consumers.

  • The most heavily-weighted factor in the rankings — nearly a quarter of it — was ‘account maintenance’. That just doesn’t strike me as the single biggest factor in how valuable a hotel loyalty program is. Note that this isn’t “customer service” which is its own category and worth just 5% of the survey’s weight.

  • They factor how easy it is to earn (which will heavily weight number of points earned and number of partners with which you can earn) and ease of redemption (but not the value of what you’re redeeming for).

  • An undisclosed amount — less than 5% of the weighting — is based on ‘variety of benefits available’ which is the closest they get to how well a hotel chain actually treats its guests on-property, or to elite benefits — things which have to factor in heavily when evaluating a hotel loyalty program.

About 3800 people were surveyed. Delta Privilege comes in third and Drury comes in fifth.

  • There’s no comment from JD Power on their beliefs about how this is or isn’t a representative sample of loyalty program members voting.
  • Or about statistical significance. How many of those 3800 could possibly be in the data ranking Drury’s program?

Bear that in mind when evaluating that the results they came up with are Marriott Rewards as the best program, followed by IHG Rewards Club, and that the worst are Best Western Rewards and Hyatt Gold Passport.

I don’t have an issue with these being the results of a ranking per se although I disagree vehemently with this estimation (personally I think the best hotel loyalty programs are Hyatt, Starwood, and Kimpton).

Instead I don’t give this much credence because t’s JD Power. JD Power sells its research to the subjects of its award rankings and sells companies the right to market their winning of these awards.

How any journalistic outlet can report JD Power findings without noting that companies promoting their awards are paying JD Power to do so is truly beyond me.

Later this month I’ll be honored to hand out Freddie Awards to airline and hotel loyalty programs from around the world.

There is no perfect measure of what program is best, but this is directly voted on by millions of frequent travelers (rather than weighted based on an internal metric). I will disagree with many of the assessments by program members, and that’s fine — it is not an award by a panel of experts, it attempts to capture public opinion. And it’s always humbling to see where there’s a real gap in my views of program value and those of frequent travelers around the world. I can feel really out of touch with what’s important to members.

One of the most common questions I get from programs when talking to them about the Freddies is how much it costs to enter? Or how much it costs to attend the ceremony? What kind of license fees they have to pay to promote the award?

The answer is no fee at all. As long as a program describes the awards and their performance accurately, they’re simply reporting on what frequent travelers have said about their program. And there are sponsors picking up the tab for dinner and trophies, some who want their brand in front of loyalty program leaders. Last year one of our sponsors, USA Today, even gave us a full page color add with which to congratulate winners.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Grant – exactly!! Makes me question the “reliability”/meaningfulness of their auto rankings (which are a major focus of their business). Consumer Reports is probably a much more accurate indicator of what you and I are finding to be the most reliable vehicles.

  2. Meh, all of the loyalty ranking/awards programs are deeply flawed. And yes, that includes the Freddies and the FlyerTalk awards. Heck, *especially* the Freddies and the FlyerTalk awards.

    What each individual wants out of a loyalty program is as unique as that person. You and I like suite upgrades. Others like a free ROH room. Others just want lounge access. Each of those preferences would lead me to love a different hotel program the best.

    So JD Powers nor the Freddies help me choose the best program for ME.

    Further, only a relatively tiny number of travelers have significant experience with multiple hotel loyalty programs in a single year. Same with multiple airline programs. Hence few voters are picking ‘better.’ All they are saying whether if they are happy or not with *their* favorite program that year or not. If yes, they vote for it. If no, they abstain or vote for some other random program they have little or no personal experience with.

    Meaning the Freddies are nothing more than a measure of how happy a particular brand’s customers are with it that year. Doesn’t say why. Doesn’t provide any meaningful or useful information for frequent travelers or any consumer. This is exacerbated because the brands all now send email spam to their members begging for Freddie votes.

    Perhaps that’s why there’s a gap between your views of program value and the Freddie winners…?

    Sorry to be so negative, but it is what it is.

    But have fun at the party!!!! 😀

  3. I think the real moral is not to trust survey results without looking into the methods. Gary complains that Skift doesn’t mention JD Power is a paid service, but he blames JD Power for the rankings and suggests he would have measured different things or weighted them differently.

  4. Love to see the bloggers riff on TripAdvisor ratings. Everytime I use it, I really think half are fakes. What’s needed is a TA “fake detector/filterer”

  5. Just to add to what I wrote before: TripAdvisor is way more influential that JD Powers or Freddie. I certainly don’t give a rat’s ass if a chain won one of these “awards”. But I do look at TA each and every time I go somewhere new.

    Gary, stop wasting time on these lame awards that no one except the recipient cares about. Someone needs to focus on the big dog: TA.

  6. While I certainly do not agree with the JDP rankings. A poll of million people doesn’t tell you which is the best either, it just tells you which is the most popular.

  7. @bluecat – there are certainly lots of fake reviews on tripadvisor. Here’s how you use them. Ignore the rankings. Look at the photos, and look for patterns of specifics in the reviews — a one off review good or bad doesn’t matter, repeated references to mold matters.

  8. @kokonutz – I actually think it does provide a useful data point to know how happy a very large group of customers are in a given year. It’s not as useful to me or you because we’ll base it on much deeper knowledge of a program’s particulars. But understanding where the public is matters, and I want to think I’m humble enough to do a double take when I’m on a completely different page from the public in terms of what’s good and realize it doesn’t mean the public is just stupid, it means that I may be out of step. Cool as far as it goes, but humbling still.

  9. JD Power uses junk science to sell sponsorships. Several years ago I bought a new car from a dealership. Within a month, I got a JD Power survey on my experience. Over 75% of the questions were related to individual components of my car; whether XYZ worked. Well, it’s a brand new car, of course XYZ worked! No questions were related to the customer service provided by the dealer. The whole survey was pointless.

  10. “@kokonutz – I actually think it does provide a useful data point ”

    I am shocked – SHOCKED – that you would say that. ;-p

    “But understanding where the public is matters…”

    Again, you are not measuring where the public is. A scientific survey could tell us where the public is. That’s not what the Freddies are. You are measuring, relatively speaking, how happy or upset a brand’s customers are with their favorite brand at the moment they are voting (or not) for their favorite brand.

    That’s certainly telling us *something.* It’s just not something at all useful to anyone.

  11. That seems like it would have been a meaningful criticism of the voting methodology used 5 years ago (pick a program and give it a value vote), it doesn’t seem especially on point any more. While not a perfect survey instrument the current methodology benefits from great input from political scientists and professional pollsters in the DC area, and many of the imperfections are well covered up by the sheer volume of voting.

    Again, not perfect, no tool would be. But when programs that I don’t think much of win it reminds me that there are members valuing things differently than I do. And that’s both great and humbling.

  12. Freddies will probably go to American Scareways and Hilton………it will be a lovely death dance…………….they both have mastered the market for the lower middle class…………

  13. I found this study and most studies of this nature a bunch of BS. It really amounts to what program best meets YOUR needs, as to how you travel, how often, the type of accommodations, what’s important to you and many ofther factors.
    As a middle class person, who is retired, staying in lower – mid level properties, the number of promotions, properties, earning opportunites, flexibility, customer service are most important. For me LaQuinta Returns and IHG do the job very well. But this is me, hardly anyone else on the list.

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